NY Post Larry Brooks: NHL Selling Out Fans - Not Games

[bling]

A lot of NHL clubs are still bleeding dollars, hence revenue sharing. The successful teams are spending their own money to improve the product by making all 30 teams viable. Look at the way the western conference is now, all 15 teams have a shot at the playoffs. That improves the product on the ice, night in, night out. If you think allowing one team to spend 80M on their salary while the team filling the other locker room can only spend 22M is an improvement on today's product, I don't know what to tell you.

My team is forced to support the poorly managed and poorly run franchises that could not or would not build a decent team. As well as being forced to allow those same teams we have to subsidize sign our better players because the artificial financial constraints of the salary cap have forced us to let these players go.

How you can call this "rob Peter to pay Paul" environment anything close to a traditional business?

 

[Timmy]

My team is forced to support the poorly managed and poorly run franchises that could not or would not build a decent team. As well as being forced to allow those same teams we have to subsidize sign our better players because the artificial financial constraints of the salary cap have forced us to let these players go.

How you can call this "rob Peter to pay Paul" environment anything close to a traditional business?

The problem is, some big-spending teams didn't have the revenue to cover the payroll, and the parent companies forked over the money to make up the operating deficit. So, in effect, parent companies were subsidizing some teams that could not afford to have such inflated salaries without an allowance from the owners.

Ordinarily, nobody would particularly care if a parent company subsidized a poorly performing division, but when such subsidizations inflate league-wide salary benchmarks, it is a problem for teams trying operate at at least a break-even pace.

Therefore, it is not a traditional business, and artificial constraints had to be put in place to ensure that people who wish to run their teams for a profit now have a chance to do so, while those who wish to run them at a deficit because the owner wants a cup (damn the costs) can no longer do so.

 

[bling]

The problem is, some big-spending teams didn't have the revenue to cover the payroll, and the parent companies forked over the money to make up the operating deficit. So, in effect, parent companies were subsidizing some teams that could not afford to have such inflated salaries without an allowance from the owners.

Ordinarily, nobody would particularly care if a parent company subsidized a poorly performing division, but when such subsidizations inflate league-wide salary benchmarks, it is a problem for teams trying operate at at least a break-even pace.

Therefore, it is not a traditional business, and artificial constraints had to be put in place to ensure that people who wish to run their teams for a profit now have a chance to do so, while those who wish to run them at a deficit because the owner wants a cup (damn the costs) can no longer do so.

So in your opinion it is better to have my team pay to subsidize your poorly managed team, rather than having the actual people/business or whatever caused the deficit be responsible?

If the team owner wants a cup and damn the costs, let us make that team and owner responsible. Destroying well managed and profitable teams in order to make up for the ignorance and poor business acumen of a few inept owners seems like a thing far beyond logic to me.

 

[burstgreen]

My team is forced to support the poorly managed and poorly run franchises that could not or would not build a decent team. As well as being forced to allow those same teams we have to subsidize sign our better players because the artificial financial constraints of the salary cap have forced us to let these players go.

How you can call this "rob Peter to pay Paul" environment anything close to a traditional business?

The "businesses" are not the individual franchises. The various NHL teams are not independent businesses competing against each other any more than a McDonalds in Los Angeles "competes" against a McDonalds in Toronto. Sure, they "compete" against other as part of a game, but not as businesses. The "business" is the NHL, and the individual teams are just franchises. The NHL's goal is to maximize revenues for the business, that being the NHL: the amalgamation of NHL teams. The NHL is competing against numerous other forms of entertainment: other sports, other tv programs, mimes, etc.

The NHL has decided to manage its internal finances (the finances among its franchises) so as to maximize overall revenue for the NHL. The fact that some franchises are more profitable than others does not make the NHL anything other than a business.

 

[Timmy]

If the team owner wants a cup and damn the costs, let us make that team and owner responsible. Destroying well managed and profitable teams in order to make up for the ignorance and poor business acumen of a few inept owners seems like a thing far beyond logic to me.

Unfortunately, it only takes a few inept owners and GMs to ruin the party for everyone, and they are who the cap targets.

I agree that some teams get caught in the crossfire, and the Canucks were one of them, but that's the new reality. Owners wanted cost certainty, and they got it.

 

[bling]

The "businesses" are not the individual franchises. The various NHL teams are not independent businesses competing against each other any more than a McDonalds in Los Angeles "competes" against a McDonalds in Toronto. Sure, they "compete" against other as part of a game, but not as businesses. The "business" is the NHL, and the individual teams are just franchises. The NHL's goal is to maximize revenues for the business, that being the NHL: the amalgamation of NHL teams. The NHL is competing against numerous other forms of entertainment: other sports, other tv programs, mimes, etc.

The NHL has decided to manage its internal finances (the finances among its franchises) so as to maximize overall revenue for the NHL. The fact that some franchises are more profitable than others does not make the NHL anything other than a business.

That is far too simplistic an analogy to explain the issues. If a McDonalds in Toronto is successfull and makes a lot of money they are not forced to send a percentage of their profits to a crappy non profitable store in L.A. Nor are they forced to send their most skilled hamburger flippers to the crappy store.

 

[bling]

Unfortunately, it only takes a few inept owners and GMs to ruin the party for everyone, and they are who the cap targets.

I agree that some teams get caught in the crossfire, and the Canucks were one of them, but that's the new reality. Owners wanted cost certainty, and they got it.

Inept owners wanted the cap and managed to convince enough of the weak minded greedy fence sitters that they too should support the cap. Financially responsible owners did not support it but were forced to accept it as a majority decision.

 

[burstgreen]

Inept owners wanted the cap and managed to convince enough of the weak minded greedy fence sitters that they too should support the cap. Financially responsible owners did not support it but were forced to accept it as a majority decision.

Your opinion is that a majority of owners were inept. Also, rather than a mere "majority," the decision was unanimous. So accordingly, all owners must have been inept?

Another problem with your logic is the presumption that a team's revenues, and thus their status as givers or receivers in revenue sharing, is somehow linked to the owner's abilities. In fact, there is a much stronger correlation between market size and revenues. The correlation between revenues and ownership talent is a very weak one--revenues have a lot more to do with demographics.

It should not be surprising that the Rangers have greater revenues than the Sabres, seeing as the Rangers' metro area has approximately twenty times more people than the Sabres' metro area, not to mention a much wealthier fan base. To say that the Rangers have more revenue than the Sabres because of the Rangers' superior ownership is overwhelmingly silly.

 

[Timmy]

Inept owners wanted the cap and managed to convince enough of the weak minded greedy fence sitters that they too should support the cap. Financially responsible owners did not support it but were forced to accept it as a majority decision.

Thirteen teams made money in 2004.

If a guage of competence is the ability for a business to make money, then there were only thirteen competent owners in the NHL just before the lockout.

Such owners included those of the Canadiens, Wild, Blackhawks, Lightning, Preds, Oilers, Bruins, Flames, Sharks, Canucks, and Blue Jackets. They were all pro-salary cap, with the Leafs being the sole opponent to the cap.

The rest of the owners, including the Avalanche and Rangers were incompetent and losing money hand over fist, and yet they didn't want a cap, because they enjoyed losing money and didn't mind running their business at a deficit.


If only all the greedy fence-sitting money grubbers were willing to lose money every year for the sake of some fans in some markets, this whole lockout thing could have been completely avoided.

 

[Pepper]

At the 2004 All-Star Game, league commissioner Gary Bettman said, "I believe with the right economic system, many, many, if not most of our teams, will actually lower ticket prices. I believe we owe it to our fans to have lower ticket prices." .

Highlighted the important part of the quote.

We don't know what the right economic system is.

 

[bling]

Your opinion is that a majority of owners were inept. Also, rather than a mere "majority," the decision was unanimous. So accordingly, all owners must have been inept?

Another problem with your logic is the presumption that a team's revenues, and thus their status as givers or receivers in revenue sharing, is somehow linked to the owner's abilities. In fact, there is a much stronger correlation between market size and revenues. The correlation between revenues and ownership talent is a very weak one--revenues have a lot more to do with demographics.

It should not be surprising that the Rangers have greater revenues than the Sabres, seeing as the Rangers' metro area has approximately twenty times more people than the Sabres' metro area, not to mention a much wealthier fan base. To say that the Rangers have more revenue than the Sabres because of the Rangers' superior ownership is overwhelmingly silly.

The only allowable decision from Bettman was unanimity. To do so he presented the majority rule as indicating unanimity. In other words it was an all or nothing thing. You know, like the presidential election, where a simple majority is all that is needed for a less than worthy candidate to become president.

Although you are correct that the market along with an owners ability to manage their team plus many other variables contribute to the financial success of a team, the facts are that poor management is the biggest factor in the lack of success of any given team. By poor mamnagement I mean a lack of desire to ice a competitive team or a lack of capital. In which case the team should be sold someone who can afford to manage it properly rather than force the other teams to contribute to your corporate welfare.

 

[bling]

Highlighted the important part of the quote.

We don't know what the right economic system is.

Just Bettman double speak. I am speaking to the flavor of the quote that indicates that with a salary cap or "ost certainty" teams would be expected to pass that cost savings on to the paying public rather than sticking it in their own pockets.

I am still appalled and rather frightened at how many people on these boards not only welcome getting ripped off by the league but actively defend the right of the NHL owners group to continue to do so.

 

[ColoradoHockeyFan]

The rest of the owners, including the Avalanche and Rangers were incompetent and losing money hand over fist, and yet they didn't want a cap, because they enjoyed losing money and didn't mind running their business at a deficit.

Avs ownership was incompetent and "losing money hand over fist?"

 

[Timmy]

By poor mamnagement I mean a lack of desire to ice a competitive team or a lack of capital. In which case the team should be sold someone who can afford to manage it properly rather than force the other teams to contribute to your corporate welfare.

So, a measure of this competence would be a wins per payroll ratio, with a higher number being better? Or, as Forbes puts it:

http://www.forbes.com/2004/11/10/04nhland.html

Compares the number of wins per player payroll relative to the rest of the NHL. Postseason wins count twice as much as regular season wins. A score of 120 means that the team achieved 20% more victories per dollar of payroll compared with the league average.

So, let's see who was managing their teams properly.

The Leafs player-to-cost ratio was 86 - not very good, but at least they turned a profit.

Ooh, Minnesota is a whopping 131, which means they won 31% more games per dollar of payroll than the average. And yet, they supported the cap!

The Oilers at 114 and the Flames at 170 doing a pretty good job of getting good value for their money as well, much to my chagrin. And yet, they wanted a cap, which seems a tad strange.

And the Nuckleheads, at 118, were also a large proponent of the cap.

Curiouser and curiouser.

Now, let's look at some incompetent teams. Well, the Avalanche is at 84, which means, I'm afraid, that your GM didn't really benefit from his large payroll and operating deficit. Oh, and the Rangers at 41 can only be described as pitiful, and yet all those contracts made 29 other GM's jobs harder.

Yup, incompetent management all wanted the cap to protect themselves from themselves, while the folks in New York and Denver wanted a free-market system so that they could plod along with below-average performances...

 

[bling]

Thirteen teams made money in 2004.

If a guage of competence is the ability for a business to make money, then there were only thirteen competent owners in the NHL just before the lockout.

Such owners included those of the Canadiens, Wild, Blackhawks, Lightning, Preds, Oilers, Bruins, Flames, Sharks, Canucks, and Blue Jackets. They were all pro-salary cap, with the Leafs being the sole opponent to the cap.

The rest of the owners, including the Avalanche and Rangers were incompetent and losing money hand over fist, and yet they didn't want a cap, because they enjoyed losing money and didn't mind running their business at a deficit.


If only all the greedy fence-sitting money grubbers were willing to lose money every year for the sake of some fans in some markets, this whole lockout thing could have been completely avoided.

I must have missed your post ..Wow, interesting to try to figure out what you are trying to say here.

You say the Leafs were the only ones opposed to the cap? Yet you then say the Avs and Rangers were also opposed. Or did you mean the Leafs were the only money making team that was oposed to the cap?

Wait, where did you hear that the Avs and Rags lost miney hand over fist?

I am pretty sure you are wrong there. But then it really is impossible to know what teams really lost money or made money with the way the team's/league's accountants go about hiding revenue and moving money around in their own little shell games.

 

[Pepper]

Just Bettman double speak. I am speaking to the flavor of the quote that indicates that with a salary cap or "ost certainty" teams would be expected to pass that cost savings on to the paying public rather than sticking it in their own pockets.

I am still appalled and rather frightened at how many people on these boards not only welcome getting ripped off by the league but actively defend the right of the NHL owners group to continue to do so.

You're just badly wrapped in your pro-PA propaganda spewed by Strachan and Brooks that you interpret Bettman's speeches selectively without any objectivity.

Fact: Bettman didn't say ticket prices will drop because of this new CBA.

Fact: Ticket prices DID actually fall after lock-out

Fact: Ticket prices will keep rising in every major sport, it's part of basic economics.

 

[Timmy]

Avs ownership was incompetent and "losing money hand over fist?"

Actually, I like the Avs, but Bling is telling me that incompetent GMs needed the cap to survive. I'm pointing out that Colorado lost money (USD 1.1m) with it's payroll, and, by a Bling definition, was therefore "incompetent".

 

[Timmy]

I am pretty sure you are wrong there. But then it really is impossible to know what teams really lost money or made money with the way the team's/league's accountants go about hiding revenue and moving money around in their own little shell games.

http://www.forbes.com/2004/11/10/04nhland.html

And Forbes was the conservative report.

But, if you wish to maintain the fallback position of "Well, it's all just a shell game," I'm done trying to show you that "good" teams lost money while "corporate welfare" teams made money.

 

[X0ssbar]

So do you think the NFL would be better off having 5 or 6 super franchises who outspend and outwin every other franchise in the league? Think Green Bay would survive? What about Jacksonville or Indy or Cinci or Buffalo?

The new CBA is setup for the benefit of all 30 franchises not just the high spending ones. Every team has a realistic chance of at least making the playoffs and that's what its all about. Instead of 5 or 6 markets selling out and spending all the dough now everything is spread out amongst all 30 franchises -- players, revenue and attendance. Where Colorado may dip in attendace maybe a place like Chicago picks up the slack (which they could very well do if the keep on winning). Not every market will be strong but find me a league where every market is -- even the power house that is the NFL has markets that struggle (see Buffalo this year or Arizona last year when the new stadium hadn't arrived yet).

This league is in much better shape than it was prior to the lockout. To think otherwise then you just not looking at the big picture. Sure some franchises took some hits but its all for the betterment of the league and the game. Sure there are lots of challenges to face but again every league has them. Also attendance is still up from where it was pre-lockout days and lets not lose sight of the fact we are still rebounded for an unprecedented year off from the game. It took the MLB years to get attendace back to where it was pre-cancelled world series -- the NHL is already there.

As far as the article from Brooks -- nothing more than sour grapes. Does this guy ever write anything positive about the NHL? His schtik is so transparent at this point is like eating stale Doritos. If he really has this much problem with the NHL then change jobs/sports/get lost.

 

[bling]

So, a measure of this competence would be a wins per payroll ratio, with a higher number being better? Or, as Forbes puts it:

http://www.forbes.com/2004/11/10/04nhland.html


So, let's see who was managing their teams properly.

The Leafs player-to-cost ratio was 86 - not very good, but at least they turned a profit.

Ooh, Minnesota is a whopping 131, which means they won 31% more games per dollar of payroll than the average. And yet, they supported the cap!

The Oilers at 114 and the Flames at 170 doing a pretty good job of getting good value for their money as well, much to my chagrin. And yet, they wanted a cap, which seems a tad strange.

And the Nuckleheads, at 118, were also a large proponent of the cap.

Curiouser and curiouser.

Now, let's look at some incompetent teams. Well, the Avalanche is at 84, which means, I'm afraid, that your GM didn't really benefit from his large payroll and operating deficit. Oh, and the Rangers at 41 can only be described as pitiful, and yet all those contracts made 29 other GM's jobs harder.

Yup, incompetent management all wanted the cap to protect themselves from themselves, while the folks in New York and Denver wanted a free-market system so that they could plod along with below-average performances...

You can create any comaparator to come up with a set of facts that will support any premise you chose.

To me the real issue is, rather than forcing a system of corporate welfare to shore up unprofitable businesses, those businesses should be sold to those willing to properly manage and fund them.

 

[19nazzy]

Prices are exactly what they were two years ago and owner costs have been basically cut in half for our franchise.

And in many cases, have risen even more.

 

[bling]

Actually, I like the Avs, but Bling is telling me that incompetent GMs needed the cap to survive. I'm pointing out that Colorado lost money (USD 1.1m) with it's payroll, and, by a Bling definition, was therefore "incompetent".

Actually having an on paper loss of $1.1 million when you are/were #6 on the list of highest valued teams hardly equates to losing money hand over fist.

 

[bling]

You're just badly wrapped in your pro-PA propaganda spewed by Strachan and Brooks that you interpret Bettman's speeches selectively without any objectivity.

Fact: Bettman didn't say ticket prices will drop because of this new CBA.

Fact: Ticket prices DID actually fall after lock-out

Fact: Ticket prices will keep rising in every major sport, it's part of basic economics.

In hopes of keeping the fans around some teams did make a small token effort to reduce ticket prices for last season. However those small reductions have pretty much disappeared and now with the teams player costs being reduced by at least half in most cases the ticket prices continue to climb. Inflation may be the answer for other sports entities but hockey has reduced costs and still raised prices but go ahead and defend this if it makes it easier for you to keep shelling out your money.

 

[burstgreen]

Although you are correct that the market along with an owners ability to manage their team plus many other variables contribute to the financial success of a team, the facts are that poor management is the biggest factor in the lack of success of any given team. By poor mamnagement I mean a lack of desire to ice a competitive team or a lack of capital. In which case the team should be sold someone who can afford to manage it properly rather than force the other teams to contribute to your corporate welfare.

I'm not sure what kind of teams you are referring to re: lack of desire to ice a competitive team. Again, you're equating payroll to desire, when in fact, a team's payroll pre-lockout was directly tied to the team's revenues, which was dependant upon market demographics. The fact that Rangers spent more than Buffalo on payroll had nothing at all to do with the owner's "desire to ice a competitive team" or an ability to "manage [the team] properly." New York's higher payroll was almost exclusively a result of its massive revenues as a result of its incredibly large market and immensely wealthy fanbase.

If Buffalo had spent as much as the Rangers on payroll, rather than "managing [the team] properly," Buffalo would have been committing financial suicide. Even if Buffalo were to win the cup each and every year pre-lockout, its revenues would not come close to supporting Rangers-level payroll.

In short, your conclusion that "poor management is the biggest factor in the lack of success of any given team" is absolutely wrong if by "success" you mean profit.

 

[ColoradoHockeyFan]

Actually, I like the Avs, but Bling is telling me that incompetent GMs needed the cap to survive. I'm pointing out that Colorado lost money (USD 1.1m) with it's payroll, and, by a Bling definition, was therefore "incompetent".

That's the only part I was questioning. It was odd to hear Avs ownership characterized as incompetent and "losing money hand over fist" based on a reported $1.1 million loss (which is pretty tiny and may not even tell the whole story anyway).